Beverage manufacturers may need to resort to stronger pricing in order to offset volume sales declines.
As consumers shift toward healthier lifestyles, the beverage market, especially the carbonated soft drinks sect, is struggling to regain favor among consumers. New data has revealed that the beverage market did not fare well in the recent four week period.
All Channel Sales Results
Beverage Dollar Sales Decelerate
Nielson Data, as reported by Wells Fargo Securities, has revealed that all channel dollar sales for beverages during the recent four week period, ending May 21, 2016, has revealed declines for each of the major manufacturers:
- Total beverage sales for The Coca-Cola Co. were down -3.1% last month. This decline was driven by softness in nearly all categories, particularly carbonated soft drinks, but was offset by strength in teas.
- PepsiCo Inc. total beverage and snack dollar sales were down -1.9% last month. Solid performance in salty snacks and some middle-aisle food categories was offset by weakness in carbonated soft drinks, sports drinks, juices and teas.
- Last month, total beverage dollar sales for Dr. Pepper Snapple Group were down -2.5%, driven by softness in the majority of categories.
- Monster dollar sales were down sequentially from +6% for the last 12 weeks, but were still up +4.2% during the period.
Soft Volumes Partially Offset by Strong Pricing for Carbonated Soft Drinks (excluding-Energy)
Dollar Sales Decline for Coca-Cola, PepsiCo and Dr. Pepper Snapple
Wells Fargo Securities reported that Nielson data revealed that total carbonated soft drink (excluding-Energy) dollar sales in all channels were down -4.7% during the four week period. These declines were driven by strong average equal price growth of +2.7%, and were offset by equal unit volume declines of -7.4%. Wells Fargo Securities also provided data which illustrates a decline in carbonated soft drink dollar sales from the top three manufacturers:
- Average equal price growth of +2.5% was offset by equal unit volume declines, resulting in dollar sales being down -4.6% for Coca-Cola’s carbonated soft drink dollar sales.
- Brand Coke, which accounts for 43% of Coca-Cola carbonated soft drink sales, had its worst month in a year, with dollar sales declines of -5.5%.
- Driven by weak -9% equal unit volume, which was partially offset by +2.8% average equal price growth, PepsiCo’s carbonated soft drink dollar sales weakened to -6.4% dollar sales declines.
- Pepper Snapple’s carbonated soft drink dollar sales were down -2.4% last month as a result of average equal price increases +2.2% and equal unit volume declines of -4.6%.
Red Bull Declines Weigh on Category; Monster and Rockstar Remain Solid
According to the Nielson data reported by Wells Fargo Securities, the energy category generated very soft dollar sales growth of only +1.5%. The soft growth was driven by weaker trends:
- Dollar sales for Red Bull were down -4.9% this period. This decline was driven by -4.6% equal unit volume and weak -0.4% average equal pricing.
- Monster results were also soft, down sequentially to +4.2% dollar sales growth (compared to stronger +6.0% growth for 12-weeks). The growth was driven by +1.4% equal unit volume growth and +2.7% average equal pricing growth.
- Rockstar dollar sales remained solid with a strong +10.9% increase.
- PepsiCo’s Kickstart remains strong at +10.6%; however, growth was sequentially down.
Beer Category Further Softens
Constellation Brands Inc. Continues to Outperform
Beer dollar sales were down -1.1% in the recent four week period, according to the Neilson data reported by Wells Fargo Securities. The decline was driven by equal unit declines of -4.2%, and was partially offset by +3.1% pricing.
- Anheuser-Busch InBev dollar sales were down -2.5%. The sales decline can be attributed to the -4.5% decline in equal unit volume, which was partially offset by a +2.1% average equal price increase.
- MillerCoors dollar sales were down -5.5%, with average pricing up +2.9% and equal unit volumes down -7.5%.
- Constellation Brands experienced strong sales growth of +10%, as average pricing was up +3.3% and equal unit volume was up +6.5%.
Salty Snacks Remain Strong
Growth Led by Improvements for Most Manufacturers and Solid Frito-Lay Results
The report from Wells Fargo Securities showed that Nielson data revealed a +2.5% increase in salty snacks dollar sales. The growth resulted from +0.2% equal unit growth and +2.3% equal unit pricing.
- PepsiCo’s Frito-Lay dollar sales remained solid throughout the period, as they were up +1.6%, driven by +0.3% equal unit volume growth and +1.3% average equal pricing.